MoneyGram 2009 Annual Report Download - page 110

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
evaluated before long-term capital market assumptions are determined. The long-term portfolio return also takes proper consideration of
diversification and rebalancing. Peer data and historical returns are reviewed for reasonableness and appropriateness.
The health care cost trend rate assumption has a significant effect on the amounts reported. A one-percentage point change in assumed
health care trends would have the following effects for 2009:
One Percentage One Percentage
(Amounts in thousands) Point Increase Point Decrease
Effect on total of service and interest cost components $ 329 $ (254)
Effect on postretirement benefit obligation 489 (403)
Pension Assets — The Company employs a total return investment approach whereby a mix of equities and fixed income securities are
used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful
consideration of plan liabilities, plan funded status and corporate financial condition. The investment portfolio contains a diversified
blend of equity and fixed income securities. Furthermore, equity securities are diversified across United States and non-United States
stocks, as well as growth, value, and small and large capitalizations. Other assets, such as real estate and cash, are used judiciously to
enhance long-term returns while improving portfolio diversification. The Company strives to maintain an equity and fixed income
securities allocation mix of approximately 60 percent and 40 percent, respectively. Investment risk is measured and monitored on an
ongoing basis through quarterly investment portfolio reviews and annual liability measurements.
The Company's weighted-average asset allocation for the defined benefit pension plan by asset category at the measurement date of
December 31 is as follows:
2009 2008
Equity securities 55.6% 57.8%
Fixed income securities 35.0% 32.9%
Real estate 5.5% 5.1%
Other 3.9% 4.2%
Total 100.0% 100.0%
The Company records its pension assets at fair value as described in Note 5 — Fair Value Measurement. Following are the Company's
financial assets recorded at fair value by hierarchy level as of December 31:
2009
(Amounts in thousands) Level 1 Level 2 Level 3 Total
Equity securities $ — $ 57,244 $ — $ 57,244
Fixed income 5,008 30,978 — 35,986
Real estate — — 5,688 5,688
Other 2,298 1,692 — 3,990
Total financial assets $ 7,306 $ 89,914 $ 5,688 $ 102,908
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